I fought for a Consumer Financial Protection Bureau, and when it passed and I headed to Washington to set it up, I committed myself to two goals. I was determined to put in place the building blocks of an agency that would stand up for middle class families, and I was also determined that this agency would help level the regulatory playing field between big financial institutions and small ones. I believed that if this agency became another agency that took its cues from the thundering herds of lobbyists for large financial institutions, we might as well pack up and go home.
One of my first priorities was to connect personally with small bankers in each of our 50 states. Day in and day out, I met with the hard-working people who run community banks and credit unions. Over the course of nearly a year, I met with hundreds of people who are on the front lines in keeping a small financial institution running. Those meetings were enormously valuable. Working closely with community bankers, the agency took the first steps to level the playing field by following one basic idea: Simplify the rules. With simple rules, we could push down the costs of compliance.
This is precisely what Washington needs to do more often. We need to reduce complexity and cut compliance costs. We need to make changes that level the playing field between big corporations and small businesses.
I believe that clearer, simpler regulation - regulation that is designed to work for small businesses and consumers--can help make markets work better. The financial crisis showed us what happens when regulations aren't enforced and giant Wall Street businesses have too little oversight. Deregulation certainly didn't help the small banks and credit unions that got swept up in that mess. But we also can't keep layering on one regulation after another, adding more and more complexity, without assessing the effects on families and small businesses.
We need a new approach that includes a serious assessment of the compliance cost of current regulations and whether adequate protection for consumers can be accomplished using cheaper, simpler approaches, or, in specific cases, if the regulations are so heavily layered on top of each other, that some can be cut altogether.